The distribution chain of products from a manufacturer to the seller or store typically includes several intermediate entities. FIG. 1 is a block diagram 100 of a simple product distribution chain. A product produced at a manufacturer 108 is sent to a wholesaler 106 in large quantities for further distribution. The wholesaler 106 in turn redistributes products to chain distribution center 104. The chain distribution center 104 is a regional warehouse to divide the goods received from the wholesaler 106 into smaller lots as required by the store 102. This distribution chain can be greatly expanded by including multiple wholesalers as shown wholesaler 1→n 112 along with multiple chain distribution centers 1→n 114 along with multiple stores 1→n 116.
Brand quality is important to manufacturers of products. Products that are damaged, outdated, expired, recalled, discontinued or unsaleable for any other reason are a concern for manufacturers. Unsaleable products can expose manufacturers to legal liability and may damage the manufacturer's reputation and goodwill. To increase the manufacturer's goodwill and to decrease any legal exposures, manufacturers must handle unsaleable products. Manufacturers control the return-processing to ensure the complete removal of the product from the distribution channel and managed the reclamation flow.
If the store 102 has an unsaleable product that needs to be disposed, the store typically ships the product back to a reclamation center 110. Any credits for the returned products are sent back to the store 102 from the reclamation center 110.
Manufacturers often run return centers that must inventory returned and unsaleable products, then match the unsaleable products for any claims data for payments. The process of tracking each product returned is tedious and prone to errors. The seller not only has to “sweep” their shelves and inventory occasionally for products to return but arrange for shipping and financial tracking as well. The number of products of inventory handled can be large from hundreds to thousands of products. Products returned must be tracked not only by product name, but other information must also be supplied, such as the model number, if any, and serial number and tag number distinguished. Because all the products in inventory are not from one manufacturer, the problem of tracking and handling returns from multiple manufacturers becomes even more complicated. Not only does each product have different return policies, each manufacturer may have different return policies for the same product. The processing returns for multiple manufacturers, each with distinct return policies and perhaps distinct reporting formats makes the process of tracking products even more tedious and prone to errors.
To help with the return-processing, several companies have begun offering services to aggregate all of the returns processing for the Chain distribution center 104 and stores 102. One such return aggregator is USF Processors of Dallas Texas, or Universal Solution International Inc, of Winston-Salem, N.C., or Pharmaceutical Processing Headquarters of Conyers Georgia.
USF offers a service of receiving the returned products from the stores 102, identifying which store returned what product to the manufacturers 108 (where appropriate) for receipt of return payment, if any. The return payment is sent to the corresponding store 102. The return-processing aggregation is sometimes thought of as a “reverse checkout process” because like the store “check out,” products shipped to the aggregators are “scanned” into the system at the reclamation center 110. But unlike the “check out” process the products are not in inventory for sale, but in inventory for return and disposal. The aggregators typically take a percentage of the money paid by the manufacturers as a fee for processing the products for the stores.
These reclamation centers 110 and aggregator, although useful, are not without their shortcomings. One shortcoming with the current aggregator system is that the store must be associated with a large network of stores such as a chain to take advantage of services such as return-processing aggregators. The attendant paper work for return-processing is onerous. In addition, the return and disposal of many products are regulated under state and federal agencies such as the FDA (Food and Drug Administration), EPA (Environmental Protection Agency) and the PDMA (Pharmaceutical Drug Market Act). The rules that sellers 102 and reclamation centers 110 must abide by are complex. Rules are even more complex with highly regulated products such as drugs, pharmaceuticals, hazardous waste, biological products and environmentally hazardous products, such as nuclear products. Accordingly, a need exists for a method and apparatus to permit stores of any size, even the small “Mom and Pop” stores, to efficiently return products for processing while complying with the numerous government regulations.
Another shortcoming with the use of return-processing centers 110 or aggregators is that many stores that sell pharmaceuticals are not EPA regulated. Accordingly the disposal of stores trying to dispose of or return products regulated by the EPA must use reclamation centers 110 or aggregators that are EPA compliant.
Another shortcoming with the use of return-processing centers 110 or aggregators is that the processing of payments can take a long time. The return-processing aggregators must receive the product, notify the manufacturer 108 or wholesaler 106, invoice the manufacturer or wholesaler for payment and finally receive payment from the manufacturer and pay the store. This payment process often takes three to six months to complete. The delay in processing credit and payments can be substantial and for large stores the accounts receivable for a return-processing inventory can run into the millions of dollars. In addition, several state governments, such as Pennsylvania, require stores to pay taxes on inventory, even though the inventory may be unsaleable and slated to be returned. It is not until the return credit is issued that the tax liability of unsaleable inventory is eliminated. Accordingly, a need exists for a method and apparatus to expedite the processing of payments to sellers for products disposed.
Still, another shortcoming with the use of return-processing centers 110 or aggregators is the inability to efficiently handle “short-dated” inventory. Short-dated inventory is inventory that has not expired yet, but will expire within a few weeks or months. Short-dated inventory can be a large problem in such diverse industries such as pharmaceuticals and food. Although, in many instances manufacturers or wholesalers will not accept short-dated inventory until the inventory expires, there is an after market for short-dated products. Moreover, many times, stores 102 and manufacturers 108 want to donate short-dated products for tax credits. Accordingly, a need exists for a method and system to handle the processing of short-dated products for resale and donation.